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Retail Marketers Score In Connecticut Ruling

November 9, 1998
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Retail Marketers Score In Connecticut Ruling

In an interim decision on retail gas competition last week, Connecticut regulators bowed to pressure from marketers by lowering balancing penalties, allowing imbalance trading and ordering the state's three LDCs to provide a monthly economic comparison of various cash-out methodologies.

The order issued Oct. 28 in dockets 95-02-07, 93-03-09 and 92-02-19 installs daily balancing requirements for transportation services to small industrial, commercial and multifamily dwellings. It also removes customer pooling restrictions, approves separate tariffs for marketers and end users, and simplifies transportation customer sign-up procedures and customer billing practices. The Connecticut Department of Public Utility Control (DPUC) delayed implementation of the new rules until Jan. 1 from Nov. 1 to give all parties more time to adjust to the changes.

It was a big victory for retail marketers, particularly in the area of penalties. Yankee Gas was proposing a $30/Dth penalty for daily imbalances greater than 10%, while Connecticut Natural Gas (CNG) was proposing an initial penalty of $15/Dth with an escalation following each additional imbalance offense that reached $238/Mcf by the fifth imbalance. The DPUC, however, chopped down penalties to only $5/Mcf, saying it was concerned they would stifle competition. No penalties will be charged on Southern Connecticut Gas's (SCG) FT2 customers. The DPUC did say, however, marketers with more than five imbalance violations in a year must sign up for an LDC's stand-by balancing service.

The DPUC also revised the cash-out plans of the LDCs, saying there should be a monthly comparison to judge whether an LDC's gas costs are reasonable. Some of the LDCs proposed charging their highest monthly gas cost to marketers with underdeliveries and paying their lowest monthly gas costs to marketers who overdelivered. Marketers requested published price indexes be used instead.

The marketers still are not satisfied with the resolution of the cash-out issue. The Connecticut agency will be monitoring the results and expects to eventually choose just one procedure. Rocco Canonica

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